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Food and Grocery Retailing in France – Market

Summary & Forecasts Comprehensive overview of the market, consumer, and competitive context, with retail sales value and

forecasts to 2019

Report Code: RT0148SR

Published: August 2015

Report Price: US$1,250 (Single Copy)

©Conlumino 2015 | This product is licensed and is not to be photocopied or reproduced. 2

Food and Grocery Retailing in France – Market Summary & Forecasts


Summary

Food and grocery is by far the largest product category, accounting for a majority of the total retail sales in

2014. French consumers are showing greater inclination to procure local and organic products and are willing to

pay a premium for them as they strongly believe in the quality of foods produced locally. National and private

brands need to offer discounts to lure customers; however, quality cannot be compromised as French

consumers consider quality an essential attribute. This is one of the major reasons behind why the online

channel covers only xx% of the food and grocery market in the country.

Key Findings

Food and grocery is expected to grow at a CAGR of xx%.

Conscious consumerism is on the rise, fueling the demand for organic and local food products.

Demand for luxury, ready-to-eat food items, and healthy categories including organics, will result in higher

spending on food and groceries.

Growing aging population and single households in France open new opportunities for retailers.

The online channel covers only xx% of the food and grocery market and is expected to cover xx% by 2019.

Reasons to Buy

Get France food and grocery market performance across key channels – accurate, reliable data for

companies already operating in and those wishing to enter the market

Performance of individual product categories, across key channels from 2009, with forecasts until 2019

– pinpoint the fastest growing categories in a market witnessing robust growth

Vital economic and population trends, key consumer and technology trends influencing the retail market

–explore novel opportunities that allow you to align your product offerings and strategies to meet

demand

Critical insights into French shoppers - what stores do shoppers prefer? Have the right insights to beat

off the competition by effectively promoting to lucrative market segments

Analysis of key international and domestic players operating in the food and grocery market – including

store counts and revenues that give you a competitive edge - identify opportunities to improve market

share




1. Retail – Product Sectors

1.1 Food and Grocery Category Overview

1.1.1 Food and Grocery by Channel

Food and grocery is the largest category group with a share of xx% of the total French retail market in 2014, or

EURxx million in retail sales. The category is expected to remain the largest in sales value terms during the

forecast period, with sales expected to reach EURxx million by 2019, growing at a CAGR of xx%.

Figure 1: France Food and Grocery Retail Sales and Forecast (EURbn), by Channel Group, 2009–2019

Source: Conlumino © Conlumino

xx

xx

xx

xx

xx

xx

xx

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019

Fra

nce fo

od

an

d g

rocery

Reta

il S

ale

s a

nd

Fo

recast (E

UR

), B

y C

han

nel

Gro

up

, 2009

–2019

Value retailers

Online

Specialist retailers

General retailers




Table 1: France Food and Grocery Retail Sales (EUR bn), by Channel Group, 2009–2014

Channel group 2009 2010 2011 2012 2013 2014

CAGR (%) 2009 –

2014

General retailers


Value retailers

Online

Overall


Table 2: France Food and Grocery Retail Sales Forecast (EURbn), by Channel Group, 2014–2019

Channel group 2014 2015 2016 2017 2018 2019

CAGR (%) 2014 –

2019

General retailers


Value retailers

Online

Overall


Table 3: France Food and Grocery Retail Segmentation (% value), by Category, 2009–2019

Channel group 2009 2014 2019


General retailers

Online retailers

Value retailers

Overall





1.2 Product Sector Analysis

1.2.1 Food and Grocery

French consumers are conscious about what they eat and there is growing awareness of the benefits of healthy

eating, which is driving the food and grocery market. People are increasingly becoming interested in organic

food. The increasing median age of the population means more elders, who are conscious about diet, are ready

to spend more on food and grocery purchases.

Customers are also reluctant to drive to hypermarkets, which are typically located on the outskirts. This trend

will help the growth of sales in convenience stores and supermarkets. The online channel covers only xx% of

the food and grocery market owing to the difficulty in delivering products in a short space of time and French

consumers’ preference for fresh food. This channel is expected to grow at a CAGR of xx% in the forecast period

to cover xx% by 2019.

Figure 2: Share of Food and Grocery in overall Retail 2014 and 2019


xx%

2019Food and Grocery

xx%

2014




Figure 3: Retail Sales Value and Growth (EUR Billion, %) of Food and Grocery 2014–2019


Figure 4: Online Share of total Food and Grocery Spend 2014 and 2019


x% x% x%x% x%

x%

x%

x%

x%

x%

x%

x%

x%

xx

xx

xx

xx

xx

xx

xx

2014 2015 2016 2017 2018 2019

Yo

Y S

ale

s G

row

th i

n (%

)

Fo

od

an

d G

rocery

Sale

s i

n (

EU

R b

illi

on

)

Food and Grocery Sales in (EUR billion) YoY Sales Growth (%)

xx%

2019

xx%

2014

Online




Summary Methodology

Overview

All data in this series of retail reports from Conlumino is rigorously sourced using a comprehensive,

standardized methodology. This methodology ensures that all data is thoroughly researched and cross–

checked against a number of sources and validation processes. At the core of this methodology is a

triangulated market sizing approach, which ensures that results from different sources and approaches,

including Conlumino’s own industry surveys, are compared and a final consensus number between these

inputs is derived. In addition, standardized processes and quality controls across the entire data

collection, analysis and publication process ensure compliance and cross–checking of the data occurs at

each stage of the methodology.

The triangulated market sizing method

The triangulation method ensures that the results from three distinct phases of the research are brought

together and cross–compared before finalized market numbers are derived:

1. Existing internal resources: as retail data is compiled using a rolling annual program of industry research, the first stage of producing the data is to review the existing internal information, both from the last major data release, as well as that which has been collected on an ongoing basis throughout the year. This includes inputs about market as well as individual retailer performance. These sources are then reviewed and incorporated into data collection processes and databases before the second intensive phase of desk research.

2. Extensive desk research: this phase of the methodology incorporates the main phase of secondary research. This research is initially conducted across a wealth of information sources, as listed below. In addition, the results of any relevant surveys from other Conlumino projects are also fed into data collection sheets. Online industry surveys can include industry opinion surveys of retailers’ — and their suppliers’ — sentiment and consumer surveys of purchasing and retail behavior. Secondary sources include, but are not limited to, the following:

a. Industry surveys b. Industry and trade association research c. Trade portals d. Company filings and analyst presentations e. Broker and investment analyst reports f. International organizations g. Government statistics h. Retail media i. National Press, including both business and consumer titles

3. Market modeling:the next stage in the process is to feed the results of the above into market

models, which also include drive–based forecasting tools — which analyze drivers such as disposable income, product uptake, macro–economic drivers and market momentum — in order to fill in any gaps in the data and update forecast numbers. At this stage, the market models also look to update channel distribution data sets. For example, information found at




the research and trend monitoring stage on online retail sales would directly affect the channel distribution models.

4. Data finalization: the final stage of the process is the true triangulation of all the previous inputs. At this stage data is created using the inputs to hand in a bottom–up fashion, starting with the inputs from each of the previous three stages of the process for each data point to be published. This is done for all the product, channel and country combinations covered in the data. At this stage, therefore, the project analysts are constantly evaluating and deciding upon the relative merits of each of the inputs from the research processes. Once a triangulated set of data has been finalized, these outputs are then thoroughly cross–checked using a series of top–down checks which review the data against a series of reference benchmarking, including known overall retail sizes, growth trends and per–capita spending rates.

Figure 5: The Triangulated Market Sizing Methodology

Source: Conlumino / © Conlumino




Industry surveys in the creation of retail market data

Stage 2 of the above process includes using the outputs of Conlumino’s surveys of consumers’ packaged

goods consumption and industry opinion. Every year Conlumino completes a large scale survey, with

over 120,000 responses, covering CPG purchasing and consumption habits in 10 core retail markets

around the globe. This major study, cross-referenced against the primary telephone research of product

market sizes by country, provides outputs against which relevant retail market data, focusing on the

grocery channel and core products in this channel are assessed. It should be noted that overall, this feeds

research into 3 of the 25 product categories covered. In addition, any other suitable surveys conducted by

Conlumino which also provide information on retail markets are mined for information to be put into the

data finalization process.

Quality control and standardized processes

Crucial to the function of the above method is the adoption of strict definitions for all products and

channels, and adherence to a standardized process at each and every stage in the methodology. By

following this approach all data is made cross-comparable across countries to ensure that analysis adds

to the understanding of market dynamics and trends.

The key elements of this approach are:

Strict channel definitions: the definition of each channel is the same in every country;

Strict product definitions: the definition of each product is the same in every country;

Standardized processes:

o Data capture – all data received as part of the research is captured in standardized files and in a

standard format. Any workings that analysts carry out on inputs, for example to correct for

misalignment in category coverage, are also covered in these sheets

o Data creation – all modeling and forecasting approaches are standardized in order to ensure

consistency

o Finalization and verification – systematic methods and approaches are used to finalize data

points

Country by country research structure: all research is conducted country by country in order to

ensure that market data reflect local market trends and contexts

Data checks during “bottom-up” creation: during the data creation and finalization stage analysts

refer back to initial sources and inputs in order to ensure accuracy in the data

Top down data audits and cross-checks: a large series of cross-checks across all the different

dimensions of the final data sets are run in order to identify any outliers or trends that do not fit with

Conlumino’s market understanding, as well as to conduct specific analyses against set proofing

criteria, such as abnormal growth rate changes, verifying data at both the overall and detailed level

against research inputs and checking per capita spends against other analysis of consumers’

spending in a country

Hierarchical review processes: finally, all of the above processes are subject to a hierarchical

review process which ensures that not only the core analysts within a team look at the data, but that

at each stage data is passed through several management layers in order that queries and data

review and sign-off are completed before any final data can be published




Table of Contents

1. Introduction .................................................................................................6

1.1 What is this Report About? .................................................................................. 6

2. Executive Summary & Outlook ..................................................................7

3. Market Context ............................................................................................9

3.1 A slowing economy with new challenges for retailers .......................................... 9

3.1.1 Weakening French economy will slow down retailers’ growth ............................................ 9

3.1.2 Household saving rates remains high ............................................................................... 13

3.1.3 Services sector remains the dominant sector for employment ......................................... 14

3.1.4 Threat of deflation is a concern for the French economy .................................................. 16

3.1.5 Sluggish growth in household consumption expenditure .................................................. 17

3.2 Aging population creating new opportunities for retailers ................................... 20

4. French Shoppers ....................................................................................... 24

4.1 The aging population and growing single households have different needs ...... 24

4.2 Demand for organic and locally sourced food products on the rise .................... 26

4.3 Private labels face tough challenges from national brands even as consumers

purchasing power declines ......................................................................................... 28

4.4 Click and drive-through outlets – now a mature retail format in France.............. 29

4.5 Tourism to largely boost the luxury market in France ........................................ 31

5. Doing Business in France ........................................................................ 34

5.1 Summary ........................................................................................................... 34

5.1.1 Bureaucracy ...................................................................................................................... 34

5.1.2 Business culture ................................................................................................................ 34

5.1.3 Geography ......................................................................................................................... 35

5.1.4 Infrastructure and logistics ................................................................................................ 35

5.2 Factors influencing investments in France ......................................................... 35

5.3 Laws to reduce the associated risks at the POS stations .................................. 36

5.4 France passes “anti-Amazon law” in favor of small bookstores ......................... 36

5.5 Sales being state-regulated and restricted to only twice a year ......................... 36

5.6 Taxation in France............................................................................................. 37

5.6.1 Corporate income tax ........................................................................................................ 37

5.6.2 Withholding tax .................................................................................................................. 38

5.6.3 Personal income tax .......................................................................................................... 38

5.6.4 Value added tax (VAT) ...................................................................................................... 38




6. Retail – Product Sectors ........................................................................... 39

6.1 Product Sector Analysis .................................................................................... 39

6.1.1 Food and Grocery ............................................................................................................. 39

6.2 Food and Grocery Category Overview .............................................................. 43

6.4 Major Retailers .................................................................................................. 70

6.4.1 Food and Grocery ............................................................................................................. 70

7. Appendix .................................................................................................... 72

7.1 Definitions ......................................................................................................... 72

7.2 Summary Methodology ..................................................................................... 76

7.3 About Conlumino ............................................................................................... 79

7.4 Disclaimer ......................................................................................................... 79




List of Figures

Figure 1: GDP Value (US$ billion), 2008–2014 ............................................................................................................................................ 10 Figure 2: Growth Rate of GDP (US$ billion, %), 2008–2014......................................................................................................................... 11 Figure 3: GDP Value and Growth (EUR billion, %), 2008–2014 ................................................................................................................... 12 Figure 4: Forecasts for GDP Value and Growth (EUR billion, %),2014–2019 ............................................................................................... 12 Figure 5: Gross Domestic Savings Rate (% of GDP), 2004–2014 ................................................................................................................ 13 Figure 6: Share of Employment by Sector (%), 2004 and 2014E .................................................................................................................. 14 Figure 7: Unemployment Rate(%), 2004–2014 ............................................................................................................................................ 15 Figure 8: Inflation Growth Rates (%), 2004–2014 ......................................................................................................................................... 16 Figure 9: Household Consumption Expenditure of France (EUR billion), 2004 and 2014 ............................................................................. 17 Figure 10: Household Consumption Expenditure of Major Countries (US$ billion), 2014 .............................................................................. 18 Figure 11: Growth of Household Consumption Expenditure (US$, %), 2004–2014 ...................................................................................... 18 Figure 12: Rural and Urban Populations (millions) 2004, 2014, and 2019 .................................................................................................... 19 Figure 13: Total Population and Growth Rate (Millions, %), 2004–2019 ....................................................................................................... 20 Figure 14: Population Split by Gender (%), 2014 and 2019 .......................................................................................................................... 21 Figure 15: Population Split by Age Group (%), 2014 and 2019 ..................................................................................................................... 21 Figure 16: Per Capita Spend on Retail (EUR), 2006 and 2014 ..................................................................................................................... 22 Figure 17: Per Capita Spend (EUR) and Total Retail Spend by Age Group (%), 2006 and 2014 .................................................................. 23 Figure 18: Aging consumers and single households are set to grow further ................................................................................................. 25 Figure 19: Demand for organic and locally sourced food products on a rise ................................................................................................. 27 Figure 20: Click and drive through outlets are on an increase ...................................................................................................................... 30 Figure 21: Tourist arrivals to France, (in thousands),2009 and 2014 ............................................................................................................ 32 Figure 22: Major Cities with High Spend on Retail ........................................................................................................................................ 33 Figure 23: Key Components of Doing Business in France ............................................................................................................................ 34 Figure 24: Share of Food and Grocery in Total Retail Sales, 2014 and 2019 ............................................................................................... 39 Figure 25: Retail Sales Value and Growth (EUR billion, %) of Food and Grocery, 2014–2019 ..................................................................... 40 Figure 26: Spend per Head on Food and Grocery, 2014 and 2019 .............................................................................................................. 40 Figure 27: Online Spend in Food and Grocery (EUR billion, %) 2014–2019 ................................................................................................. 41 Figure 28: Online Share of total Food and Grocery Spend, 2014 and 2019 .................................................................................................. 41 Figure 29: Spending per Channel in Food and Grocery (%), 2014 and 2019 ................................................................................................ 42 Figure 30: France Food and Grocery Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 ................................................ 43 Figure 31: France Food and Grocery Retail Market Dynamics, by Channel Group, 2009–2019 ................................................................... 44 Figure 32: France Food and Grocery Retail Sales and Forecast (EUR mn), by Category 2009–2019 .......................................................... 47 Figure 33: France Food and Grocery Retail Market Dynamics, by Category 2009–2019 .............................................................................. 48 Figure 34: France Drinks Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 .................................................................. 51 Figure 35: France Household Products Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 ............................................ 55 Figure 36: France Packaged Food Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 ................................................... 59 Figure 37: France Tobacco Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 .............................................................. 62 Figure 38: France Unpackaged Food Retail Sales and Forecast (EUR mn), by Channel Group, 2009–2019 ............................................... 66 Figure 39: The Triangulated Market Sizing Methodology .............................................................................................................................. 77




List of Tables

Table 1: France Food and Grocery Retail Sales (EUR mn), by Channel Group, 2009–2014 ........................................................................ 44 Table 2: France Food and Grocery Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019.......................................................... 45 Table 3: France Food and Grocery Retail Sales (US$ mn), by Channel Group, 2009–2014 ......................................................................... 45 Table 4: France Food and Grocery Retail Sales Forecast (US$ mn), by Channel Group, 2014–2019 .......................................................... 46 Table 5: France Food and Grocery Retail Segmentation (% value), by Channel Group, 2009–2019 ............................................................ 46 Table 6: France Food and Grocery Retail Sales (EUR mn), by Category 2009–2014 ................................................................................... 48 Table 7: France Food and Grocery Retail Sales Forecast (EUR mn), by Category 2014–2019 .................................................................... 49 Table 8: France) Food and Grocery Retail Sales (US$ mn), by Category, 2009–2014 ................................................................................. 49 Table 9: France Food and Grocery Retail Sales Forecast (EUR mn), by Category 2014–2019 .................................................................... 50 Table 10: France Food and Grocery Retail Segmentation (% value), by Category, 2009–2019 .................................................................... 50 Table 11: France Drinks Retail Sales (EUR mn), by Channel Group, 2009–2014 ......................................................................................... 52 Table 12: France Drinks Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019 .......................................................................... 52 Table 13: France Drinks Retail Sales (US$ mn), by Channel Group, 2009–2014 ......................................................................................... 53 Table 14: France Drinks Retail Sales Forecast (US$ mn), by Channel Group, 2014–2019........................................................................... 53 Table 15: France Drinks Retail Segmentation, by Channel Group, 2009–2019 ............................................................................................ 54 Table 16: France Household Products Retail Sales (EUR mn), by Channel Group, 2009–2014 ................................................................... 56 Table 17: France Household Products Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019 .................................................... 56 Table 18: France Household Products Retail Sales (US$ mn), by Channel Group, 2009–2014 ................................................................... 57 Table 19: France Household Products Retail Sales Forecast (US$ mn), by Channel Group, 2014–2019 ..................................................... 57 Table 20: France Household Products Retail Segmentation, by Channel Group, 2009–2019 ....................................................................... 58 Table 21: France Packaged Food Retail Sales (EUR mn), by Channel Group, 2009–2014 .......................................................................... 59 Table 22: France Packaged Food Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019 ........................................................... 60 Table 23: France Packaged Food Retail Sales (US$ mn), by Channel Group, 2009–2014........................................................................... 60 Table 24: France Packaged Food Retail Sales Forecast (US$ mn), by Channel Group, 2014–2019 ............................................................ 61 Table 25: France Packaged Food Retail Segmentation, by Channel Group, 2009–2019 .............................................................................. 61 Table 26: France Tobacco Retail Sales (EUR mn), by Channel Group, 2009–2014 ..................................................................................... 63 Table 27: France Tobacco Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019 ...................................................................... 63 Table 28: France Tobacco Retail Sales (US$ mn), by Channel Group, 2009–2014 ...................................................................................... 64 Table 29: France Tobacco Retail Sales Forecast (US$ mn), by Channel Group, 2014–2019 ....................................................................... 65 Table 30: France Tobacco Retail Segmentation, by Channel Group, 2009–2019 ......................................................................................... 65 Table 31: France Unpackaged Food Retail Sales (EUR mn), by Channel Group, 2009–2014 ...................................................................... 67 Table 32: France Unpackaged Food Retail Sales Forecast (EUR mn), by Channel Group, 2014–2019 ....................................................... 67 Table 33: France Unpackaged Food Retail Sales (US$ mn), by Channel Group, 2009–2014 ...................................................................... 68 Table 34: France Unpackaged Food Retail Sales Forecast (US$ mn), by Channel, 2014–2019................................................................... 68 Table 35: France Unpackaged Food Retail Segmentation, by Channel Group, 2009–2019.......................................................................... 69 Table 36: Key Food and Grocery Retailers in France ................................................................................................................................... 70 Table 37: France Exchange Rate EUR–USD (Annual Average), 2009–2014 ............................................................................................... 72 Table 38: France Exchange Rate EUR–USD (Annual Average), 2015–2019 Forecasts ............................................................................... 72 Table 39: Conlumino Retail Channel Definitions .......................................................................................................................................... 73 Table 40: Conlumino Retail Category Definitions ......................................................................................................................................... 75




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decisions.

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